Flow Oriented Organization Design
Process organization before structural organization
The reason for the emphasis on the organizational structure is that it is focused on utilizing resources effectively.
The process organization focuses on a fast flow of information and products. It “stumbles” at departmental and divisional boundaries and thus slows down.
To the extent that speed becomes more important than stability, the process organization also becomes more important.
For the vast majority of today’s organizations, it can be summarized as: process before structure; this has far-reaching effects on decision-making structures and power distribution.
Reinertsen’s heuristics for flow
Agile and lean emphasize a holistic, continuous flow of consistent development (“from concept to cash”). The most important element of the evaluation is the value achieved. In contrast to this, traditional project management tends to focus more on the process. In this case, value is created almost as a by-product.
At the heart of an effective product development flow are a few central principles [Reinertsen 2009]. They make it easier to assess how specific goals can be achieved and how they need to be adapted to the culture and environment of the company.
Don Reinertsen has compiled the most important heuristics as nine rules. Many of these heuristics can be found in Kanban and SAFe.
#1: Take an economic point of view
Build an explicit decision-making framework for the specific context. This must be done separately at the various levels: team, program, or enterprise.
This decision-making framework must be based on an understanding of the entire value chain and focus on optimizing future flow. It forms the basis for decisions to be made locally, because it ensures a consistent system of objectives.
Reinertsen describes five typical elements of such a framework:
- Development cost – The cost of developing a decision or acquiring a capability
- Cycle time – The time to implement the decision
- Cost – The cost of manufacturing, delivery and operation
- Value – The value of the decision for the company and for the customers
- Risk – The increase or reduction of uncertainty or the technical viability of the solution
If the goal is to maximize value creation, you have to pay specific attention to getting the most important activities done first. In particular, this means prioritizing activities with high risk and low costs.
Opportunity costs (cost of delay) play a special role here. Reinertsen recommends considering this aspect first.
#2: Think in systems
A special place is given to the integration of systems thinking, as formulated by William Edwards Deming [Deming 2000]. Deming repeatedly calls for developing an overall view of a system and taking a longer-term perspective. The most important theses from this point of view are:
- A system must have an intention in order to function purposefully.
- Optimizing a part does not necessarily optimize the entire system.
- A system cannot move faster than its slowest point of integration.
- Apply a continuous improvement process.
These views are applied to the developed system, i.e. to the product and also to the company as a system.
Another of Deming’s theories is also incorporated into SAFe at a fundamental level: only management can change a system [Deming 1993]. Therefore, SAFe explicitly holds management accountable for developing and structuring leadership (management) and corporate culture.
#3: Expect variability – preserve options
In manufacturing, the aim is to reduce variability as much as possible in order to achieve predictable results, efficiency and quality. This cannot be the goal in software development, because we do not have serial production, but rather “piece production” and strong innovative and creative elements. Variability is therefore unavoidable and necessary to some extent.
Instead, you should construct systems that can handle variability and use it when possible. This helps to make decisions later and keep options open until more information is available to make decisions.
In agile development, the related requirement of “embrace change” and the central activity of regular prioritization in the course of development are familiar and take these circumstances into account.
#4: Develop incrementally with fast integrated learning cycles
Short planning cycles provide rapid feedback. “Spikes”, i.e. targeted prototypical implementations, can be used to avoid excessive uncertainty and generate more knowledge. They are part of the effort to reduce unwanted uncertainty through targeted rapid feedback.
In agile development, such feedback cycles are built into a wide range of levels:
- Agile testing, test automation, continuous integration
- Daily scrum
- sprint review, short iterations and regular releases
- team and program-level learning through retrospectives and inspect & adapt meetings
In scaled agile development, you have to explicitly plan for such feedback or integration points for the overall system (see also #5).
#5: Define milestones based on an objective evaluation of running systems
Phase-based milestones only allow a limited objective measurement of actual development progress. The leeway in an evaluation is too subjective and too great. In the negative case, wishful thinking plays too great a role in the evaluation.
With milestones based on a system’s executable functionality, many of these imponderables are eliminated and replaced by objectively measurable progress (i.e., the completion of epics, features, and user stories). This also makes it easier to keep alternatives open, set up experiments to expand knowledge, and replace functionality if necessary.
#6: Visualize and set WIP limits, reduce lot sizes and manage the length of queues
Long queues are responsible for longer cycle times, higher risks, poorer quality and lower motivation. Queues must be actively managed to achieve predictable short waiting times.
The most important tools for controlling queues are small batch sizes and limiting the number of items processed at the same time (work-in-progress or WIP limit).
The queues at the different levels of SAFe are the backlogs of the teams, the release trains and the entire portfolio.
#7: Use cadences and synchronize across areas
The tools for controlling the flow of development under uncertainty are cadence and synchronization.
Cadence means developing in a predictable, regular rhythm (such as a sprint) that helps transform unpredictable events into predictable developments. Cadences make waiting times predictable, lower transaction costs, and increase the reliability of product development.
Regular synchronization allows variance and coordination problems to be encapsulated in a single interval. Regular system-wide integration helps to achieve reliable system tests and an objective assessment of the project status. Regular synchronization supports the coordination of competing goals and the transfer of information with high bandwidth, thus helping to focus on a global optimum.
#8: Develop the intrinsic motivation of knowledge workers
Knowledge workers are individuals who often know more about their work than their superiors. In general, it is not possible to meaningfully control the results without their active participation.
This has profound consequences for the type – and necessity – of motivation: It must come from within, be intrinsic. Knowledge workers usually function best when they have a challenging task and a great deal of freedom in how they implement it. At the same time, this results in another necessity: they need to know more about the goals and the global optimization of the system in order to make targeted decisions. This results in significantly different demands on the style and actions of management.
#9: Decentralize decision-making
During a development, decisions must be made continuously. Delays in decision-making worsen the quality of the decision due to new insights in the meantime or changes in the framework conditions.
Teams must be given the authority to make decisions and to act quickly and effectively. However, they must also be willing to do so. There are close cross-relationships with principles #2 (systems thinking) and #8 (intrinsic motivation).
Categories
Siblings
Categories